The inner circle: Inside Trudeau’s economic advisory team

Every few weeks through much of 2014, Liberal Leader Justin Trudeau met on Parliament Hill with an eclectic group of business executives, university professors and think-tank policy wonks, along with a few of his own MPs. They would hash out economic issues—everything from income inequality to energy and the environment—for two hours or more. It was the sort of discussion of weighty matters that political image-makers are usually eager to draw attention to, often by issuing stilted photographs of their leader, brow furrowed, keeping serious company.

But the Liberals didn’t get around to formally announcing the roster of Trudeau’s economic council of advisers until almost the end of 2014—about eight months after its first meeting. Far from trying to attract maximum attention to it, they seemed to want to leave the council largely unnoticed. “What was important for us was for this group to have met a few times, to have done substantive work, before we started talking too much about it,” says Toronto MP Chrystia Freeland, who co-chairs the council with Nova Scotia MP Scott Brison. “We wanted this not to be about press releases.”

The suspicion in Ottawa whenever a politician assembles a blue-chip panel is that deep thinkers are window dressing, while the real decisions will be made by the usual partisan operatives. Assessing the influence of Trudeau’s group will have to wait until the Liberals’ 2015 election platform is unveiled. Still, members of the council say they sense real potential. “The discussions are very in-depth and tend to get into the weeds a great deal. It’s not just blue-skying from 40,000 feet,” says council member Mike Moffatt, a professor at Western University’s Ivey Business School (who also blogs on economic issues for Maclean’s).

Moffatt is among the academic specialists who, typically, lead off the council’s meetings by framing research on a hot topic. He’s a trade expert who also focuses on the economy of southwestern Ontario, likely a key 2015 election battleground. Another is University of Ottawa economist Miles Corak, an expert on “intergenerational mobility”—the chances of a kid earning more or less than his or her parents did. Corak worries about income inequality growing more entrenched in Canada. Kevin Milligan, who teaches at the University of British Columbia’s Vancouver School of Economics, was a sharp critic of a major tax-cut package Prime Minister Stephen Harper announced last fall, arguing it was the wrong time for relief largely benefiting high-income families.

Given Trudeau’s emphasis on middle-class income stagnation, it’s no surprise he’s turning to professors such as Corak and Milligan (another Maclean’s contributor) for ideas. Perhaps more intriguing are some of his council’s private sector members. George Gosbee, chief executive of Calgary-based AltaCorp Capital Inc.—who, previously, served on the economic advisory council of Jim Flaherty, Harper’s finance minister from 2006 until shortly before his death last spring—brings to the table an Albertan business perspective not often associated with the federal Liberals. “It was important for us that this be a truly national group, and so essential to have people who understood and were significant voices in the West,” Freeland says.

The biggest corner-office name on the list is also a senior Liberal partisan: Frank McKenna, currently deputy chair of TD Bank Group, and formerly the Liberal premier of New Brunswick, as well as Canada’s ambassador to the U.S. There’s also Bill Morneau, the former head of a Toronto-based human resources services and consulting company, who is nominated to run for the Liberals in a downtown Toronto riding in the fall election. Morneau stepped down as chair of the business-oriented C.D. Howe Institute last winter, after raising eyebrows by delivering a speech at a Liberal convention in Montreal, in which he accused Stephen Harper’s government of “partisan politics of the very worst kind.”

At the advisory council’s meetings, Morneau says strictly partisan considerations aren’t up for discussion. “Trudeau has very explicitly said to the council that this is not a place where we’re talking about how to politically get things done; this is a place where we’re trying to figure out what’s the right thing to do,” he says, adding, “That’s not to say there isn’t another table someplace where they’re talking about the political issues.” Freeland says Trudeau goes further than just asking the council not to talk about how to sell ideas to the voters; he actually reins them in when they veer from policy to politics. “Occasionally, we’ll get into a political discussion,” she says, “and he’ll say, ‘Look, I’m going to take care of the politics; these meetings are about what is the best thing to do.’ ”

Even if the council isn’t being asked to consider how to package their prescriptions for the coming campaign, Liberals have to worry about eventually selling an economic message. Harper sees economic policy as his turf. Although he has worked most of his adult life as a politician, political aide and lobbyist, Harper has an master’s degree in economics from the University of Calgary—a credential Tories like to highlight, especially when they’re also mentioning Trudeau’s pre-politics career as a teacher.

Harper spent much of last fall making life miserable for opponents seeking to craft economic policy that would put him at a disadvantage during a campaign. He was saddled with his own 2011 campaign pledge to let couples with kids split their incomes for tax purposes, a promise widely criticized, even by Flaherty, for favouring mainly well-off families. In the fall, Harper combined a modified version of income-splitting with an expansion of the Universal Child Care Benefit. That didn’t silence critics—including Milligan—but it spread the benefits of the Tories’ family-tax policy more widely, making it much more defensible. Trudeau still vows to reverse the policy if he’s elected, arguing that about half the benefits of Harper’s package will go to Canadians earning more than $100,000, and that the measure will “eat through virtually the entire federal surplus.”

Trudeau issued that comment in early November, before Harper made his latest big move on infrastructure. The Liberal leader had been signalling for months that infrastructure spending would be a key Liberal priority. Then, on Nov. 24, Harper announced a whopping $5.8 billion in new infrastructure spending of his own. Unlike some previous programs, in which Ottawa had to partner with cities and provinces, this one would target mainly federal facilities. The Prime Minister promised construction of airports, harbours, shipbuilding yards, laboratories, military and RCMP facilities. Since these projects don’t require participation from lower levels of government, they can be under way, in many cases, by next fall’s campaign.

The combination of billions in tax cuts and billions more in infrastructure outlays went a long way to erasing the surplus expected to reappear on federal balance sheets this year. But there was more to come, as plummeting oil prices forced forecasters to slash their projections for federal revenues. This week, TD Economics said the Canadian government will have to dip into its $3-billion contingency reserves just to post slim surpluses in 2015-16 and 2016-17. That leaves no margin for significant new spending in this year’s budget, and possibly not in next year’s, either.

The long-assumed context for an election—a competition among the parties for who could persuade voters they have the best plan for spending fat surpluses—is now shattered. Whatever innovations Trudeau’s advisers put on the table will have to somehow be paid for by reversing Tory promises, or pushed off into the later years of the next government’s mandate.

Figuring out who benefits politically by a more unsettled economy is far from straightforward. Pollster David Coletto, of the Ottawa firm Abacus Data, says voters tend to punish a ruling party only if they blame it for bad economic times. If they are merely anxious about the economic outlook, Coletto says, they often stick with the incumbent, out of a sense of caution.

Coletto says Conservatives don’t really enjoy the brand edge they often claim to have on basic economic competence. Asked last year how each of the three main federal parties would manage the economy, 27 per cent of Canadians polled by Abacus rated Harper and the Conservatives as good or excellent, tied with Trudeau and the Liberals, with Mulcair a bit behind, at 23 per cent. But Coletto says voters won’t really focus on Trudeau until a campaign begins—and that’s when he will be tested. “There are still some lingering questions about his competence that will come to head when the campaign begins, especially if oil prices remain low and Canadians are uncertain if the economy has turned the corner.”

By then, Trudeau’s team will have had plenty of time to figure out if the ideas his economic advisers have been debating with him in private can be sold to the voting public. He’s asked them to keep policy separate from politics. In an election year, however, what matters most is how he finally brings them together.

The common thread in all of these members is they believe in a bigger government role in the lives of Canadians than is currently the case. That means higher taxes and that they think the government knows better what to do with your money than you do. The ‘they will just spend it on beer and popcorn’ is not the view of just one liberal – it is the party ethos.

It was Justin Trudeau and his popularity that forced both Tom and Steve to show their cards first by pricing out policy before the election, the media don’t want to say that because they don’t want offend the other 2 leaders, it may make them look like idiots, and now they don’t know where the money is coming from to pay for it. The libs have held their cards back, they didn’t price policy until an election is called, smarts politics, because they can’t trust the numbers that Steve and his minions are throwing around anyway, just watch our great economic finance minister, he doesn’t even know.

The only reason they, your guy, the Economist, Harper were always doing policy pricing is because they new if they came to power, they could bank on good liberal stewardship of the treasury, when the grits were in power. The Grits new how to manage the treasury, because they had no other choice, in order to bail out the over bloated, overspend PC and Con governments who tried to govern all through the countries existence. Your guys are in BIG DO DO and you know it, its just over half the media are in the tank for the cons and they are afraid admit how incompetent they truly are , and they don’t want to loose their back door sources stories they like to talk about sometimes whenever they do their puff pieces for them. ‘Sources Tell Me’, What’s that all about ?

Really? Well if they have they have sure been hiding it well. From the PBO; from the opposition; from taxpayers.

For example, see the Small Business Job Credit, where the CPC can’t point to any government numbers to back their claims but instead cite numbers from the Canadian Federation of Independent Business – the very group who asked for the credit. Yet the government’s own PBO says the numbers they cite are out to lunch: http://business.financialpost.com/2014/10/09/jobs-canada-pbo/

So how about some concrete examples of how well they have priced policy, Gord? (Hint: you will want to steer clear of military procurement.)

If a country isn’t corrupt and is honest, of course a budget will correct it’s self. Canada has become a cesspool of corruption and shamefully so.

We see foreigners brought over and given Canadian jobs. Most foreigners send their money back to their families and that money isn’t even spent in Canada.

The big oil and gas robber barons call all the shots and Harper works for them. They demand the cheap foreign labor, to exploit.

Every time big business lines up at the trough and squeal for more money? Harper gives them another $60 billion in tax reductions. Harper steals from us to give to, the wealthiest outfits in the world.

Harper is the worst and most corrupt PM, in the recorded history of this Nation. Harper is by far the worst fiscal manager, anyone can remember.

Harper called Russia and Putin evil Communists then, sells Canada to Communist China with his FIPA deal. Now China is financing Putin. Russia is to share the vast resources in the High Arctic with China. Harper also still sells arms to Russia.

Harper has no decency, honor, scruples, ethics nor morals, what-so-ever. Harper has not one saving grace.

Really? Because I just read an article that didn’t quote Trudeau himself even once. I read an article that says he’s got a bunch of people making well over $100,000 a year contemplating how to make life better for the “middle class”, as if they’ve ever known that life. But at least he was clever enough to hire 2 Macleans writers to be part of his “council” to lend it legitimacy in the media…. or at least Macleans.

Harper got his first real job because he was hired by his father’s company, at a time when jobs in Alberta were not easy to come by. Lucky for him his father was high placed in a major corporation and he therefore was able to pass on an advantage to his son – an advantage the ordinary Joe just did not have. But apparently HE’s in touch with the middle class…

And last I heard Harper makes well over 100 grand, and is an economist (in fact, is that not what you conservative types keep touting?), so I do not understand why it is so bad for Trudeau to ask people who make that much money to assist with his economic planning. Should he ask a bunch of people who are incapable of increasing their income for financial advice?

Nope. I’m criticizing people who whine about Trudeau not being middle class when Harper has no personal experience with that lifestyle either. Just because Trudeau had more wealth as a child does not change the fact Harper did not share in the struggles of the working and middle class.

Yes, you guys are always going on about Harper starting in the mail room due to is dad’s influence. Gee thanks Dad! Meanwhile, Justin Trudeau got a job as the head of the Liberal Party of Canada and is on his way to being PM thanks to his dad. Hmmmm…..Gee dad, you could have done a little more for him. Chystia Freeland did an interview on guys just like Justin Trudeau…men who attain their positions because they use their father’s influence to get a job they didn’t earn. Here is the ironic truth, Justin Trudeau by his own standards, wouldn’t make it as a candidate to run in the Liberal Party of Canada in the upcoming election. He would get the boot. He isn’t smart enough and he is a lousy speaker in the house who makes gaffe after gaffe. If we weren’t the leader and he didn’t have his daddy’s last name, the leader would parachute in a star candidate and JT would be gone.

Yeah, cool. So you want this to be a competition between two advantaged men about which had more advantages? Clearly Trudeau was the wealthier. But that is not the issue. Look up. Look way up and see how the OP was arguing Trudeau has no right to argue for the middle class because he’s never been middle class, and his advisors all make over 100 grand a year. Note that my argument is that by that standard, Harper too has no right to argue for the middle class.

Trudeau senior was long gone by the time Trudeau won the leadership. Something he won by convincing thousands of people to vote for him. That hardly compares to Harper Sr calling down to HR and telling them to give his boy a job. In Alberta. In the 80’s. Do you know what the employment situation was for working and middle class people then? Most did not have jobs handed to them on a silver platter.

No-one lays out their policies this far from an election. Harper didn’t lay out his policies until 9 days before the last election. However, Harper’s are the same old, same old policies. His economic and job action plans that don’t exist.

Harper is an abysmal failure and has done horrific damage to this country. I feel very sorry for anyone, that has to clean up Harper’s mess.

My point is that Trudeau should maybe talk to actual middle class Canadians about their hopes and aspirations, instead of a bunch of Bay Street investment bankers. Trudeau and his entire “economic advisory team” have never struggled to make ends meet, which is why they can’t fathom the concept of people wanting lower taxes. They’re completely out of touch with reality.

Well, I see it very often in the news that he is meeting with all kinds of Canadians from various walks of life. Could be in some of those meetings that economic issues come up.

Contrast that with the Prime Minister: when was the last time he met with real, honest-to-goodness regular folks apart from MEP-circumscribed photo ops with ultra-carefully screened people, in order to announce yet another dud policy?

The group the article is talking about meets occasionally, but you make it sound as if that is the only discussion he engages in.

These pollsters always say whenever there is uncertainty in the economy or even if a strong economy and the country is in a conflict in some part of the world, voters tend to vote for the incumbent. I ask, besides the libs having a mini adscam(don’t hold a candle compared to this governments adscaming) back in 2005, Paul Martin was in a 13 billion dollar surplus and had a conflict on his hands in Afghanistan, how come he wasn’t re-elected in 2006, because Canadians were tired of the libs by then, and also the dippers voted to help Harper attain power(and Chuck Cadman)? I think it’s a little rich for these so called pollsters to be making these assumptions and feeding into the public minds, because it’s not true. If the public don’t want you there, no matter how good the economy is, or how good it’s running, if the public gets tired of them, they will throw the BUMS out. The liberal government under Martin and Chretien spent years in power, just trying to clean the mess up Mulroney left behind, and the same will happen after this election, somebodies going to have to clean up Harpers Messes.

The LPC paid back all the money. I know you think there was more, but Harper asked the RCMP to keep looking in 2006, and yet nothing more has been found.

As for the EI issue, what the SCC held was that the government would have to put it to a parliamentary vote instead of doing it through regulations. If they had put it to a vote it clearly would have passed. The SCC also held that Harper could either pay the money back or put it to a vote retroactively. Do you happen to know what option he chose?

Certainly as trustworthy as that election-rigging, robocalling, gazebo-building crowd who appoint their convicts to the Senate. At least the Liberals have cleaned house in the interim. The list of convicted or accused with close ties to Harper makes Chretien look squeaky clean by comparison.

Oh ya, real good house cleaning there by the Liberals. Not a single one of their Senators was suspended, all still collecting hefty checks from taxpayers. All still card-carrying members of the Liberal Party of Canada. But in Justin Trudeau’s Canada having 32 Senators who are members of the Liberal Party of Canada, is magically, not having any Liberal senators.

OK; can’t say as I’ve kept a score card as to who was accused under Adscam – so please enlighten me: who, among those accused of having been involved in that infamous goings-on, are still actively involved in politics and the day-to-day activities of the Liberal Party? This is a serious question; I’d be interested in knowing.

In the meantime, you may want to take a look at the list of convicts (two of whom were REWARDED for their law-breaking by being appointed to the Senate), currently-charged, under investigation, or generally pilloried for unethical behaviour among the CPC. Most of them have very close ties to the PM.

Given a choice between a party that once had a criminal element, or one which clearly has a serious ongoing problem with obeying the law, I know where my vote will go.

Mulroney spent as bad or worse than the Harper government, they cleaned the cupboards out, in fact Mulroney’s wife Mila took the carpets out of 24 Sussex just before the PCs were turfed from office, like Harper and his reivers should be today. It seems this government only knows how to cut and spend on themselves and a bloated 40 member caucus that cost enough to pay the transfer fees every years for P E I or NL.

Heh. That must be why they cut the GST over the objections of virtually every credible economist in Canada.

You see Gord, the difference is that the LPC panels are made up of experts. The CPC/Reform panels are made up of grassroots party members. Farmers are good at farming, but maybe not so good at determining the economic direction of a country.

Many economists favoured the cutting of taxes some thought upstream cuts would be better (capital gains taxes are especially corrosive to wealth creation) but at least they were cuts. I assume that you think jT should promise to increase the GST by 40%.

Oh I see. THAT explains why Trudeau said he would let the grass roots of the party pick the candidates and then lied and parachuted in his own star candidates. People like you can’t be trusted to vote for the right kind of people so your choices have to be made for you by your leader and “LPC panels made up the experts.” What I don’t understand is why the Liberal Party of Canada doesn’t remove that ridiculous propaganda from their website. They still claim that the grass roots will be choosing their own candidates. Why pretend?

How’s that working out in Alberta there Gord? It seems Jim Prentice and the Alberta government are in a meltdown as well, and you want to know why, because they have been saddling themselves with self inflicted wounds of the conservative governments this past 40 or 50 years.

This is a cute story. So Trudeau assembles a group of Liberal partisans and Macleans bloggers, and this “council” is supposed to lend him economic legitimacy? I may be mistaken, but I don’t believe Trudeau himself was quoted directly even once.

This week, TD Economics said the Canadian government will have to dip into its $3-billion contingency reserves just to post slim surpluses in 2015-16 and 2016-17.

Is that the same TD as “senior Liberal partisan: Frank McKenna, currently deputy chair of TD Bank Group, and formerly the Liberal premier of New Brunswick”, I wonder?

“The discussions are very in-depth and tend to get into the weeds a great deal. It’s not just blue-skying from 40,000 feet,” says council member Mike Moffatt, a professor at Western University’s Ivey Business School (who also blogs on economic issues for Maclean’s).

I don’t have anyhting against Moffatt advising / consulting with the Liberals.

HOWEVER, Moffatt had for a long time been flogging his “ipod Tax” against Jim Flaherty and the Conservatives, and even appearing before a parliamentary committee on the matter. And then vigorously engaging in the Ontario election questioning Tim Hudak’s math.

So, was he a closet Liberal then, or was he auditioning for his new gig?

Ms. Freeland’s expertise is identifying the plutocrats and super-rich as a slippery bunch who should be more highly taxed to pay for big-government-for-all. That means the Liberal election strategists will be able to go after:
– the Canadian Bronfman fortune, er oops Chretien let them de-Canadianize with no exit tax payable by special Order in Council
– the Desmarais fortune, er oops Chretien married his daughter off to that family
– the Martin fortune, er oops he is a former Liberal Prime Minister
– Dang it all, let’s just tax ordinary Canadians like we always do.

They didn’t blow 160 billion in taxpayers dollars to stay in power for 4 years and then lie and cheat in robocalls and election fraud to get elected the following term. Canada never heard of election fraud until Harper took power, they always thought election fraud happened in foreign countries where dictatorships are(oh we have one of them now).The problem with the cons is mostly, Harper and his minions will tell you how they will spend your tax money, where as Trudeau and the Grits, will ask you how you want your tax dollars spent. Most of Trudeau’s team now, can make a lot more money in the private world, it’s just his team are more concerned about the direction our country has gone and would like to turn the ” TILT” position button off on this government.

I see. So you believe that Trudeau will ask you, the average Canadian how to spend the money. Do you think he will do this in the same way he promised to ask you, the Liberal Party member which candidate you want to run for parliament? Do you think he will listen to you on how to spend the money or will he do just as he has done with the choosing of candidates, will he promise one thing and do the opposite. I don’t blame for you calling Harper out for being dictatorial but I don’t see any reason for believing Trudeau is any different. He threw out his entire senate caucus without even talking to them ahead of time. He has lied about letting members pick the candidates. He has given no indication that he will be more flexible than Harper.

Kenny likely is not much different in age than Trudeau. If he isn’t looking as good as Trudeau, it might be down to a couple of reasons. The first being that Margaret Trudeau is a very attractive woman and she passed those genes on to her son. The second is that Kenny is known to work very long hours.

First, agreed. I like that Macleans has in recent years been doing more economic stuff, and I like that they offer diverse opinions. But when their writers are actively working for one specific political party, that definitely presents a problem. It’s not just “perceived” bias, it’s an actual blatantly paid for bias.

Sort of like Kathleen Wynne denying she offered a position or other employment to that dude in Sudbury if he stepped out of the race.

she denied it…..until the tape recordings surfaced showing that this is exactly what the Liberals did. Now she’s trying to smooth it over by saying that any offers were due to the fact that they simply wanted this young man to stay “part of the team”

Here’s a hink Kev…..the TEAM being councilled….is corrupt, and is lead by a “leader” who’s most difficult job to date has been memorizing lines for drama club.

I look forward to the Liberal economic program. If it includes some tax increases, I am fine with that. And yes I have plenty of taxable income. I am fine with it because I think there is more to life than grabbing everything for myself. I value living in welcoming and supportive society, where I can walk down any street, where all classes have a fair kick at the can. I value the many programs initiated under Liberal governments which have helped make this one of the most livable countries in the world. I watch in growing frustration as the Harper government relentlessly cuts away at the underpinnings of Canada’s healthy society, steadily gutting important programs that benefit us all, either directly or indirectly. I and many others are seeing the valued social fabric starting to fray. As Canadians start to realize that tax cuts come with a (delayed) price in terms of the quality of the society they live in they are waking up and ready for change.

As for the Conservatives being uniquely gifted stewards of the economy, that is a myth. I can only think the reason they get traction on that is that the economy (and in particular a very narrow focus on personal incomes before consideration of social benefits) is the ONLY thing that motivates the Conservatives and so, by gum, they “must be good”. However, as it turns out, they have created a rather undiversified economy, their much touted ‘balanced budget’ is not really balanced — they would have us mistake a short term cash surplus for a ‘balanced budget’ when in fact that cash surplus is achieved by unsustainable cuts to the many necessary institutions and infrastructure components of this society. For example, of course you can cut your auto expenses in the short run by never maintaining your car, but that is not good management and it will yield regrettable outcomes. Wake up, folks, you are being led down a dead end path by myopic wannabe Republicans.

Well hopefully the advisers will be able to do simple Mathematics. Look at the Liberal website and it shows Trudeau plans to reduce middle class taxes by 7%, from 22.5 % to 20%. ?????? and they want to lead a country ?? I guess that is why Fib-erals will be running deficits, because they cant do the simplest of math, but they can offer money out the wazoo for every cause under the sun, if it will buy them votes. I am sure they can follow Ontario Liberals lead and just sell off everything to make money…

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